BlackRock has agreed to acquire Tennenbaum Capital Partners (TCP), an alternative investment manager focussed on direct lending and special situations for middle-market firms, for an undisclosed sum.

TCP reported around $9bn in committed capital at the end of December 2017. The firm has offices in Los Angeles that serves as its base, as well as in Atlanta, New York and San Francisco.

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TCP will become a wholly-owned subsidiary of BlackRock following completion of the deal.

As part of the deal, TCP’s team of more than 80 members, including its partners Lee Landrum, Michael Leitner, Howard Levkowitz, Philip Tseng, and Rajneesh Vig, will move to BlackRock.

“Our combination with BlackRock will provide TCPC with increased resources, scale, and market access to continue to build on our long track record in middle market performing credit and to enhance long-term value for our clients and shareholders,” Levkowitz noted.

The deal is slated to be completed in the third quarter of this year, subject to shareholder and regulatory approvals. BlackRock said that the transaction will not be material to its earnings.

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TCP also manages investments of TCP Capital, and will continue to do so following the acquisition.

BlackRock global co-head of credit Tim O’Hara said: “Investors seeking to generate incremental returns and portfolio diversification are increasingly turning to private credit where both expertise and platform scale can drive returns.

“This acquisition will enhance our ability to deliver clients private credit solutions that meet their investment objectives across a range of risks, liquidity, and geographies.”